The LedgersOnline staff has worked with clients around the world, of various sizes and industries. We have witnessed firsthand the potential problems that bookkeeping and accounting can cause for companies, especially when they are small and have put their finances on the back-burner while focusing on growing their business.
With this being said, the bookkeeping process is an integral part of every business, and when done properly, can give you a strong understanding of your financial positioning. Below are five simple tips that will give you the opportunity to get up-to-date on your business’ bookkeeping and accounting, and gain an insight into how you can successfully grow your business.
Personal vs. Business: Keep them Separate
It is important to keep your personal and business accounts separate from each other, as this can add hours of work to the bookkeeping process down the road. A simple way to resolve this problem is to open two credit card accounts; a personal card and a business card. This will allow for an easy bookkeeping process so you can keep track of your deductible expenses all in one place.
Mark It Down:
Your business’ finances are something that should be looked over often, but with a small business, there is generally always something else that seems more important. With that said, mark a 15 minute window on your calendar once a week, and do not let anything get in the way of it. Whether it is early Monday morning, or late Friday afternoon, spending 15 minutes to organize your finances will work wonders for your business. You will be able to make informed business decisions based on financial data, and you will be ready for the annual tax time.
Keeping track of your expenses is an important part of the bookkeeping process, and something that should be taken seriously. A credit card that is used solely for business expenses is a great way to track your expenditures. You can also apply for credit cards that are equipped for businesses, and offer the ability to insert PO numbers and Job Names while you are purchasing items.
It is also important to keep track of business expenses via journal or notepad; especially if paid in cash. For examples, you should routinely write down business trips, coffee meetings, lunches, and other events in a notepad or calendar.
Alternatively, you can use a document management system to keep track of your business expenses. An example of this would be LedgerDocs, a document management application built for small business owners, bookkeepers, and accountants. This system allows you to take a photograph of a receipt via smartphone, and send it directly into the system.
For more information on the LedgerDocs Document Management Application.
Some businesses believe that once they have sent out an invoice, the billing will take care of itself. This, unfortunately, is not the case. Every late payment can be thought of as an interest free loan to your client. This is why you need to stay on top of your payables, and create ways to deal with late payments. One method to help resolve this problem is to charge an extra fee at predetermined deadlines.
It is important to track these payments as well, as if not recorded properly, it could take months before you realize that you have outstanding invoices. Businesses should track the amount of time it takes for customers to pay, and take note of any clients who are difficult to collect from. From there, you may need to orchestrate a plan of action.
Call a Pro:
Bookkeeping and accounting firms are valuable assets to small businesses, and should not be overlooked. Many firms are able to share responsibilities, allowing for less billable hours and an overall smaller bill. LedgersOnline, for example, is able to host your current accounting application so you can access it anywhere, anytime. This allows for a number of users to have the ability to access the account, and work on the file individually.
Bookkeepers and accountants are valuable to small businesses because of their intimate knowledge of the profession. They are able to find deductions and keep your business penalty free, while offering key financial advice. There is nothing wrong with doing the work yourself, but it is always a good idea to have an accountant look over your file, especially during tax season.
We provide a customized bookkeeping services for your business: